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IRS issues guidance on transition period for FATCA implementation

Today, the IRS released Notice 2014-33, which “announces that calendar years 2014 and 2015 will be regarded as a transition period for purposes of IRS enforcement and administration with respect to the implementation of FATCA by withholding agents, foreign financial institutions (FFIs), and other entities with chapter 4 responsibilities, and with respect to certain related due diligence and withholding provisions under chapters 3 and 61, and section 3406.” This notice also “announces certain intended amendments to the regulations under sections 1441, 1442, 1471, and 1472, including amendments providing that a withholding agent or FFI may treat an obligation (which includes an account) held by an entity that is opened, executed, or issued on or after July 1, 2014, and before January 1, 2015, as a preexisting obligation for purposes of sections 1471 and 1472, subject to certain modifications set out in the notice. Taxpayers may rely on Notice 2014-33 regarding these proposed amendments to the regulations prior to their issuance.”

Robert Stack, the Treasury Department's deputy assistant secretary for international tax affairs said, “Today's notice outlines several measures to help institutions comply with FATCA in a timely manner. This notice will enhance our insight into accounts held overseas by U.S. citizens, furthering the goal of narrowing the tax gap and cracking down on tax evasion.”

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